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Gov. Rosselló defends new Puerto Rico Central Recovery & Reconstruction Office

By on October 30, 2017

SAN JUAN – Although an executive order gives a new office broad powers over the management of funds that arrive for the recovery of Puerto Rico after Hurricane Maria, Gov. Ricardo Rosselló Nevares assured it won’t have absolute control over them.

“It’s a matter of planning. Imagine trying to manage separately all these resources that Puerto Rico may get. That will create an incredible planning problem,” he said Sunday morning during a press conference in La Fortaleza.

(Juan J. Rodríguez/CB)

For the governor, the decision to create the new Central Recovery & Reconstruction Office (CRRO) responds to “best practices” after natural disasters, which require having “a centralized place” for the management of financial resources, whether state, federal or private.

“This is not an office that is going to control all the funds. It’s like a hub, a single connector to facilitate the process with the many resources that come from the federal government,” Gov. Rosselló Nevares said. He insisted “it is a matter of logistics, design, execution and collaboration with all the stakeholders.”

However, Executive Order 2017-65 establishes that the CRRO “will receive and administer all funds and resources made available” for the recovery and reconstruction efforts in Puerto Rico, no matter where they come from. The office will determine priorities and implement guidelines for the use and disbursement of those “resources.”

La Fortaleza announced Saturday the establishment of the new office by executive order, as a division under the umbrella of the Public-Private Partnerships Authority (PPPA). The latter will be the exclusive beneficiary of federal funds made available to Puerto Rico. The CRRO, moreover, will develop and implement a “strategic plan” for reconstruction in the short, medium and long terms.

Gov. Rosselló Nevares said neither the federal government nor the commonwealth’s financial control board requested the creation of the new office. The government acted “proactively,” he said.

For his part, Christian Sobrino, the government’s representative to the board, said the creation of the CRRO was consulted “informally” with the federally established panel, but not the executive order itself.

Although he believes there shall be no problems with the board, it is still unclear who has the last word over the management and supervision of the federal funds that arrive after Hurricane Maria.

“The board has oversight over the budget process and the fiscal plan. There are elements of federal programs where the board does not formally enter. That is established by Promesa,” Sobrino replied.

As for who will run the office, Gov. Rosselló Nevares said that is still being determined, although for the time being, it will be under Omar Marrero, the PPPA’s director.

Regarding Senate President Thomas Rivera Schatz’ concerns on the constitutionality of the executive order and the powers it confers to the CRRO, the governor said its creation follows the steps taken by jurisdictions such as Louisiana, New York and New Jersey and what they did after hurricanes Katrina and Sandy. He also made reference to the federal funds for infrastructure investment that the commonwealth received in 2009 and for which the Infrastructure Financing Authority (Prifa).

“The ARRA [American Recovery and Reinvestment Act] funds process occurred during an administration in which he [Rivera Schatz] was president of the Senate. This is not very different from that,” the governor said. “This is not an entity that’s going to monopolize all the funds and decide what’s going to be done.”

Within its powers, the new office can finance and execute infrastructure projects, as well as identify and seek “innovative alternatives” for financing. Any plan it makes must consider all available resources, whether federal, state or private.

The order also provides that the office will collaborate with the state coordinating officer, a position held by Héctor Pesquera, as well as with the governor’s authorized representative (GAR), José Marrero, who directs the Office of Management & Budget.

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If any law or regulation requires intervention by the aforementioned, the office must include them in its processes.

When asked why the office was not established through the GAR, Gov. Rosselló Nevares explained that because that representative works mostly with the Federal Emergency Management Agency (FEMA), it was necessary to establish a parallel structure for the management of funds that may be received from other entities.

“Resources from two sides will be sent: from FEMA and resources that aren’t FEMA’s,” the governor said. “We need to have those two structures. The GAR remains [and] has its role. José Marrero is the GAR designated to carry out this. We also want to have the other reconstruction and revitalization structure.”

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